What is the meaning of underwriting? 6 things you need to know before buying a medical insurance
When you’re in good health, you won’t worry about not being able to buy insurance, and you might even think you don’t need it. But life is unpredictable. If you suffer from a serious illness in the future and have undergone surgery, even if you’ve fully recovered, the insurance company has the right to reject your application. The U.S. Kaiser Family Foundation has estimated that nearly 30% of U.S. residents would fail underwriting due to their health conditions if applying for individual health insurance .
What exactly is underwriting? Bowtie will explain it in detail below.
What is Underwriting? Common Questions Asked
Before applying for Health Insurance / VHIS, insurance companies will underwrite each policyholder by asking questions such as height and weight, smoking and drinking habits, and whether they have ever suffered from high blood pressure, stroke, cancer, etc., to understand their health status , and then decide whether to accept the application.
When buying insurance from traditional insurance companies, insurance agents (also known as Agents) will ask you questions about the policyholder’s health. Even for more personal questions, you need to answer directly, and then the Agent will submit your answers to the “Underwriting Department” to await the underwriting results. For virtual insurance companies, policyholders can undergo underwriting online, which avoids many awkward situations (no need to answer personal questions face-to-face).
Why Undergo Underwriting for Policyholders?
First, let’s talk about how health insurance works. Insurance companies pool premiums from policyholders to form an “insurance pool.” When any policyholder makes a claim, compensation is paid from this “insurance pool.” Under this operation, insurance companies need to assess the risks through underwriting, set coverage and premiums based on different customers’ health conditions, to ensure the “insurance pool” is sufficient to provide protection for customers.
So, never think that only insurance companies benefit from underwriting; policyholders also benefit. When insurance companies properly manage underwriting risks, they can ensure policyholders receive the protection they deserve.
When is Underwriting Required?
Generally speaking, insurance companies will conduct “underwriting” at the following times:
- Applying for a new policy
- Renewing an existing policy
- Adding new family members or coverage to an existing policy
- Reducing the deductible (i.e., deductible )
However, VHIS underwriting differs slightly from general health insurance:
- Due to the “guaranteed renewal” of VHIS, there is no need for re-underwriting during renewal , so you don’t have to worry about losing your original coverage due to illness after recovery.
- Under the VHIS design, policyholders can reduce the deductible without underwriting at specified ages, allowing them to combine insurance according to different life stages without fear of losing coverage, compared to other health insurance policyholders. 💫Taking Bowtie Pink VHIS as an example, as long as the relevant policy has been in effect continuously for 2 years or more, the policyholder can apply no less than 30 days before the policy renewal date on or immediately following their 55th, 60th, 65th, 70th, 75th, or 80th birthday, to reduce or cancel the deductible without re-underwriting.
Side note: Besides VHIS, all other Bowtie products also offer guaranteed renewal!
Underwriting Process: Bowtie vs Traditional Insurers
In traditional insurance companies, it generally takes 3 weeks from the agent asking health questions to receiving the underwriting result. If a medical examination is required, it may take even longer. Additionally, underwriting methods are divided into “guaranteed underwriting” and “simplified underwriting.” “Guaranteed underwriting” involves more questions, while “simplified underwriting” may only have 3 to 5 questions.
Bowtie applicants can complete underwriting online, and the entire process of purchasing Voluntary Health Insurance can be done in as fast as 10 minutes, without needing a medical check-up*, and you can get a detailed quote within 5 minutes!
Moreover, before completing underwriting (or health declaration), applicants do not need to provide any personal information. Even if you ultimately cannot obtain a quote due to health conditions, Bowtie’s underwriting process will not leave any record of “being denied coverage.”
- *Except for individuals aged 65 or above applying for Bowtie Pink Voluntary Health Insurance Plan
Underwriting Results
There are 5 possible underwriting outcomes:
- Application approved.
- Subject to ” loading ” — meaning you need to pay additional premium for the insurance company to accept the application.
- Additional ” exclusions ” added — meaning the insurance company will not compensate for certain diseases or organ health issues.
- Wait for the insured’s health condition to improve before processing, such as having had an anal fistula (Anal Fistula).
- Denied coverage.
Loading and Exclusions Are Not Permanent
- In any case, honestly declare your health condition; otherwise, even if successfully insured, once discovered by the insurance company, it may affect future claims, ultimately not worth the loss.
- Loading and exclusions are not permanent
- If you have arranged for examinations or surgeries at the time of application, please declare truthfully. Although the policy may include Loading and exclusions at that moment, afterwards, if you have recovered or the check shows no issues, some insurance companies can re-underwrite the policy, reduce Loading, or even remove exclusions.
🎀Bowtie Real Case: A customer declared having “Anal Fistula” and was scheduled for surgery when purchasing the policy, so Bowtie added an exclusion to the policy at that time – not covering Anal Fistula. After the customer completed the surgery and recovered, they requested a review from Bowtie. After re-underwriting, we removed that exclusion.
Of course, not everyone or every situation can reduce Loading/remove exclusions. Want to know if your situation can apply for review? Contact Bowtie Customer Service Team !
Life is unpredictable; even if you are healthy today and pass underwriting smoothly, your health in the coming years or even months is hard to predict.
Bowtie suggests everyone to apply when healthy, without any suspicious symptoms! If applying for VHIS when healthy, it not only guarantees lifetime renewal but also provides coverage at standard premium (no Loading/exclusions).
Insure yourself/family, get immediate protection!
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